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A nursing home doctor has been acquitted of the murder of an elderly woman with severe dementia following a closely watched euthanasia trial in the Netherlands.

The court in The Hague concluded on Wednesday that the unidentified doctor, who has since retired, carried out euthanasia in accordance with the law and had not been negligent.

"The Court concludes that the doctor ended the patient's life by administering euthanasia at the explicit and serious request of the patient," a statement from the court said.

Prosecutors had argued that the doctor did not do enough to confirm consent in ending the life of the 74-year-old woman in 2016.

The woman had written a directive asking for euthanasia in the event she was admitted to a nursing home with dementia and she thought the time was right. But, once she was admitted to the home, she gave "mixed signals," according to an August 26 statement from the Public Prosecution Service.

The court said the doctor had not been negligent and she had spoken to the patient's physician, husband and daughter as well as consulting with the treatment team in the nursing home, the patient's psychologist and a consultant from an end-of-life clinic.

Prosecutors had not sought a punishment for the doctor, saying it did not question her good intentions but said that the case raised important legal questions.

In the Netherlands, euthanasia is strictly defined as "the active termination of life at a patient's voluntary and well-informed request," according to the Royal Dutch Medical Association. It was legalized in 2002, making the country the first in the world to authorize the practice, and this case was the first of its kind to be tried in court in the Netherlands.

This case has been seen as a test of its legal boundaries, with the public prosecutor seeking to clarify how this law applies to people suffering from dementia, especially if they are still able to communicate.

"As long as the woman was able to communicate, the nursing home doctor should have kept talking to her about her desire to live or to die," the statement from the prosecutor's office said.

However, the court said it was of the opinion that the patient was completely incapacitated and the doctor did not have to further verify her wish to die.

"A conversation with the patient would not only have been useless, because she was no longer able to have a coherent conversation, it could have caused even greater agitation and unrest," the judge said, according to the press release.